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Forest degradation in the Brazilian Amazon due to selective logging and forest fires may greatly increase the human footprint beyond outright deforestation. We demonstrate a method to quantify annual deforestation and degradation simultaneously across the entire region for the years 2000-2010 using high-resolution Landsat satellite imagery. Combining spectral mixture analysis, normalized difference fraction index, and knowledge-based decision tree classification, we mapped and assessed the accuracy to quantify forest (0.97), deforestation (0.85) and forest degradation (0.82) with an overall accuracy of 0.92. We show that 169,074 km2 of Amazonian forest was converted to human-dominated land uses, such as agriculture, from 2000 to 2010. In that same time frame, an additional 50,815 km2 of forest was directly altered by timber harvesting and/or fire, equivalent to 30% of the area converted by deforestation. While average annual outright deforestation declined by 46% between the first and second halves of the study period, annual forest degradation increased by 20%. Existing operational monitoring systems (PRODES: Monitoramento da Florestal Amazônica Brasileira por Satélite) report deforestation area to within 2% of our results, but do not account for the extensive forest degradation occurring throughout the region due to selective logging and forest fire. Annual monitoring of forest degradation across tropical forests is critical for developing land management policies as well as the monitoring of carbon stocks/emissions and protected areas.. © 2013 by the authors.